Nissan Motor Company recently revealed its plans for India – the launch of 10 new models by 2016 including the Datsun brand. For 2013-14, the Japanese major plans to launch four new products which include a CVT version of the Micra hatchback and the Sunny saloon, a ‘compact SUV’ followed by Datsun products in 2014.
Expressing their confidence in the Indian market, top officials announced that they are targeting a 10 percent market share in India by 2016, up from the current level of 1.5 percent. Under Nissan’s global ‘Power 88’ plan, its vision is to capture eight percent of the global car market by 2016. Its market share in calendar 2012 was 6.2 percent.
With the Indian passenger car market expected to hit 4.5 million cars per annum by 2016, Nissan has set itself an ambitious target of selling 450,000 cars here. Last fiscal, Nissan sold 33,000 vehicles and hopes to close the current financial year with sales of around 50,000 units. To achieve its goal of a 10 percent market share, the company will ramp up its dealership network to 300 by 2015-16. Given that the current manufacturing facility in Oragadam, Chennai, a joint facility catering to Renault-Nissan Automotive India, has a total capacity of 400,000 units, it is only logical to presume that Nissan will either enhance capacity or build a new plant altogether in order to meet its targets.
Toshiyuki Shiga, chief operating officer, Nissan Motor Co, refused to divulge any details simply saying, “Our capacity is 400,000. Our target is 450,000. So automatically, we will have to consider expansion. But right now, we have no plans.”
Shiga said this on the back of inaugurating a new manual transmission gearbox assembly line at the facility a day before the press conference.This is part of the company’s aim to further localise its products in India.
Datsun coming soon
While it’s clear that the Datsun brand (the first Datsun brand will be the K2 hatchback based on the old Micra K11 platform) will be the volume-getter, Nissan officials will not say much. “Datsun will be like an entrance to the Nissan family. After the customer uses a Datsun, we’d like him/her to upgrade to Nissan and finally, if available, to Infiniti,” said Toru Hasegawa, corporate vice-president (Africa, Middle East and India). He added that the Datsun brand will see its re-incarnation in Indonesia first, followed by India and Russia respectively.
Emphasising that the Alliance’s engineering centre in Chennai – the Renault-Nissan Technology and Business Centre India – has a major role to play in the global plans for Datsun, Hasegawa says that the Centre is going full steam ahead with its plans. “We have about 1,900 engineers working hard to bring a very good car to the market,” he says, adding “India has a very big role to play in Datsun’s development.” Hasegawa also hinted that the Datsun dealership issue doesn’t have a straight-forward solution, adding, “We will have to look at it on a city-by -city basis.”
As part of the medium-term target of 450,000 cars in India, Hasegawa said that the company aims to first hit the 100,000 mark in 2013-14. “This is about three percent market share. It is not easy. Sometimes, there’s turbulence, sometimes head winds,” he says.
While Nissan has established its Oragadam facility as a global manufacturing hub for the Micra hatchback, Hasegawa seemed to suggest he is not happy with the export numbers, saying, “We are exporting 100,000 units and it’s a good number, but personally not enough I’d say.”
Slow start for Evalia
With yearly targets set in stone by his bosses, Nissan’s man in India, managing director and CEO, Takayuki Ishida has his task cut out. Given that the company is exploring various segments in the local car market, it must be said that the recent launch of the MPV Nissan Evalia, aimed at the formidable segment leader Toyota Innova, hasn’t got off to a great start. “It’s a long-term investment and will take time,” is all that Ishida says. The Evalia (codename NV 200) is already making waves globally as a potential replacement for the iconic London cab.
In India, however, the car has had a slow start with just over 900 units sold since its late September launch. “We are going to cultivate the customer and gradually, demand is picking up,” says Ishida.
Throwing more light on the targets as opposed to plant capacity conundrum, Ishida says that it is obvious that the company needs more capacity. “To enhance the capacity, we have a lot of choice. We also have room to expand our plant here (in Oragadam). May be we can discuss with the government to get more land or look at land outside Tamil Nadu. This is a global decision. Our decision, based on the capacity utilisation at Oragadam, will be done next year,” he says.
Nissan Motor Company has exported close to 200,000 units from India to 81 countries within three years of establishing a manufacturing facility here. The company's domestic sales haven’t kept pace with exports but they are growing slowly with the company periodically boosting its portfolio with offerings like the diesel-powered Sunny and its upcoming CVT version. The current sales numbers and the fiscal targets for 2013-14 suggest that the company will leverage its Datsun brand in line with the Power 88 gameplan to give it the volumes it requires.
INTERVIEW WITH TOSHIYUKI SHIGA, COO, NISSAN MOTOR COMPANY
What is India’s role in Nissan’s Power 88 policy?
India is important. In terms of the market presence, we have a very strong objective to be a major player and are looking at a 10 percent market share.
As a market, India will play an important role in strategy. We will continuously invest in expanding our manufacturing capacity here, not only for vehicle assembly, even for engines. I just started a manual transmission assembly at the plant.
We are also inviting a lot of the parts suppliers here to India; so this country will be a very important manufacturing base and an export base as well. In two years, we have exported 200,000 units. India has many talented engineers — this is one of the strong points and which will help in our R&D activities. They (Indian engineers) are in a hurry to learn about the development of the vehicle and are fully involved in the development of the Datsun models.
There are some concerns in the Indian market in terms of policies. How is that affecting Nissan?
Since last autumn, there’s a slowdown in our sales due to the macro economy factors, diesel pricing and competition. I think that all this is short-term and am really optimistic about the potential for the Indian market.
By 2016, it will no doubt hit five million sales. As a fundamental potentiality, Indian growth is very promising.
To what extent will there be cross-badging between Renault and Nissan?
Nissan will maintain its own brand identity, which will be spoilt by too much of double-badging. But in the beginning when we are entering the market, it is better from the dealers’ point-of-view.
As a tactic to sustain the business of dealer investors, double-badging is a way to enhance the line-up. However, Renault brought its own Duster and this is successful and sustaining its network. This is a long-term strategy. I don’t think continuously doing double-badging is possible. The important thing is to establish a strong brand in the new market. To bring our own products, maintaining the brand identity is important.
Does the Power 88 plan include your LCV business?